According to Millennium Cell, the three-year Series C Preferred provides for cumulative dividends at seven percent per annum and has a stated conversion price of $2 per share, which is adjustable under certain conditions.

Under this method, the effect of the conversion of the Notes would only be included in the weighted average shares outstanding balance, and thus be dilutive, only upon exceeding the stated conversion price to be determined upon pricing.

For pricing, this is critical when considering the impact on the 'recovery rate' - the ratio between the value of a bank's equity at the CoCo conversion trigger time and the contractually stated conversion price.

In exchange for the immediate vesting of the conversion rights under the note (which allow the conversion thereof into 3 million shares of the company's common stock at the stated conversion price of $3.

In connection with the offering, the holders of the Company's currently outstanding Cumulative Convertible Preferred Stock have agreed to convert their preferred stock to common stock of the Corporation at the stated conversion price of $.

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